{"id":12361,"date":"2022-05-15T15:15:34","date_gmt":"2022-05-15T15:15:34","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/it-is-time-to-redefine-stablecoins-ftx-ceo-sam-bankman-fried-says\/"},"modified":"2022-05-15T15:15:34","modified_gmt":"2022-05-15T15:15:34","slug":"it-is-time-to-redefine-stablecoins-ftx-ceo-sam-bankman-fried-says","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/it-is-time-to-redefine-stablecoins-ftx-ceo-sam-bankman-fried-says\/","title":{"rendered":"It is Time to Redefine Stablecoins, FTX CEO Sam Bankman-Fried Says"},"content":{"rendered":"

(Originally posted on : Crypto News – iGaming.org )<\/b>
\n<\/p>\n

\n

Sam Bankman-Fried, founder and CEO of Bahamas headquartered cryptocurrency exchange, FTX<\/a>, reflected on the future of stablecoins after the past week\u2019s carnage involving TerraUSD (UST) and Terra (LUNA).<\/a><\/p>\n

According to Bankman-Fried<\/a> who took to Twitter, the so-called stablecoins need to have separate and clearly refined definitions as there is too much confusion on the accompanying mechanisms. He said:<\/p>\n

\n

\u201cA good point someone brought up recently: really \u2018stablecoin\u2019 is used to mean multiple different things.<\/p>\n

One thing it can mean is \u2018stablecoin backed 1:1 by a US dollar in a US bank account.\u2019<\/p>\n

That\u2019s what current drafts of US regulations are looking to license, as a first step.\u201d<\/p>\n<\/blockquote>\n

\u2018SBF\u2019 then\u00a0talks about other stablecoin tiers which are susceptible to volatility and risk because they are backed by a mix of assets and debts, instead of a US dollar reserve:<\/p>\n

\n

\u201cAnother is \u2018stablecoin backed >= 1:1 by liquid debt assets, treasuries, and USD\u2019. Non-zero price risk, but generally they stay very close to $1 because they can be redeemed.<\/p>\n

For example [Tether] USDT has stayed within a few % of $1 during this crash, and [I\u2019m] hearing $1b+ successfully redeemed.<\/p>\n

A third is \u2018stablecoin backed >= 1:1 by a very volatile asset.\u2019<\/p>\n

Those are \u2018algorithmic\u2019 stablecoins. If the underlying crashes, they can go down. A lot. e.g. UST.\u201d<\/p>\n<\/blockquote>\n

Going forward, Bankman-Fried\u00a0believes a solution starts with\u00a0applying distinct definitions to the different stablecoins:<\/p>\n

\n

\u201cReally we shouldn\u2019t use the same word for all of these things. What we call \u2018algorithmic stablecoins\u2019 aren\u2019t really stable in the same way that fiat-backed stablecoins are.<\/p>\n

They\u2019re more like structured products, and they need upside if they want to justify the risk.<\/p>\n

This might not seem as important to people in crypto, because we already know that algorithmic stablecoins are pretty different from fiat-backed ones. But in the policy space, that message often gets lost. We need to be explicit about it.\u201d<\/p>\n<\/blockquote>\n

On UST and the connected LUNA crisis, the FTX head said the following in response to a question:<\/p>\n

\n

\u201cThis one might be tough \u2013 the real, honest answer is that, probably, either UST or LUNA have to go to 0 (or both).<\/p>\n

There\u2019s no way to save both of them. (And it\u2019s not clear as of now that there\u2019s any way to save UST\u2019s peg even if you sacrifice LUNA.)\u201d<\/span><\/p>\n<\/blockquote>\n

At the time of writing, TerraUSD is valued at $0.2188<\/a> while LUNA is moving hands at $0.000374<\/a> according to CoinMarketCap<\/a> data.<\/p>\n<\/p><\/div>\n

Source link <\/a>
\n
<\/p>\n","protected":false},"excerpt":{"rendered":"

(Originally posted on : Crypto News – iGaming.org ) Sam Bankman-Fried, founder and CEO of Bahamas headquartered cryptocurrency exchange, FTX, reflected on the future of stablecoins after the past week\u2019s carnage involving TerraUSD (UST) and Terra (LUNA). According to Bankman-Fried who took to Twitter, the so-called stablecoins need to have separate and clearly refined definitions […]<\/p>\n","protected":false},"author":5,"featured_media":12362,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[34],"tags":[],"_links":{"self":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/12361"}],"collection":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/comments?post=12361"}],"version-history":[{"count":0,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/12361\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media\/12362"}],"wp:attachment":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media?parent=12361"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/categories?post=12361"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/tags?post=12361"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}